Regarding Myanmar & Coffee Supply Chain Development

In this article, we aim to answer the questions we most often receive from coffee roasters about Myanmar, including how we think about coffee development work in the East of the country given the recent and ongoing crisis in Rakhine state in the West.

What is happening in the Rakhine state in Myanmar?

Rakhine State, on the West coast of Myanmar, has faced long-standing tensions and conflicts between the military, the Muslim Rohingya people, and the majority Buddhist ethnic Rakhine people. This has led to mass displacement of the Rohingya and recently an emergency situation sparked by renewed conflict. The military and government have long considered the Rohingya people to be illegal immigrants, despite many Rohingya families having lived in Myanmar for decades. Neighbouring Bangladesh considers them to be Myanmar citizens, while they are denied citizenship under the country’s constitution.

Recent History

While these tensions and issues date back several centuries, the more recent history of military operations and issues for Rohingya is most important for the current context:

• In 1977 the military junta began an operation aimed at screening the population for ‘foreigners’, in which more than 200,000 Rohingya fled to Bangladesh. Following this in 1978, the UN facilitated a deal between Bangladesh and Myanmar for the repatriation of refugees, under which most Rohingya returned.

• In 1991 more than 250,000 Rohingya refugees fled persecution at the hands of the Myanmar army - the army at the time stated it was trying to bring order to Rakhine. Following this, from 1992 to 1997, around 230,000 Rohingya returned to Rakhine under another repatriation agreement.

• In 2012, rioting between Rohingya and Rakhine Buddhists killed more than 100 people, mostly Rohingya. Tens of thousands of people were driven into Bangladesh.

• In October 2016, a Rohingya militant group attacked border guard posts, killing 9 soldiers. The army retaliated and launched a military campaign against the Rohingya. More than 25,000 people fled Rakhine to Bangladesh, bringing accounts of killing, rape, and arson.

While these events have occurred over several decades, exacerbated or driven by the military, the context in recent years is different. 2015 saw the first election of a civilian government in Myanmar, following 50 years of military rule. Now that the current government has opened up the country both economically and politically, the world’s eyes are on Myanmar’s leaders to cease the violence.

The civilian government however, does not have control over the military and holds few levers for control in the region. The armed forces retain total control of ‘security matters’ in Myanmar, including the three security-related cabinet posts, a 25% allocation of all parliamentary seats and veto power over changes to the constitution. This political structure means that the Myanmar civilian government must balance the interests of several parties to navigate a peaceful transition. The success of the next elections in 2020 and further democratic reforms are far from guaranteed and a loss of control risks a devolvement into military rule.

What can be done?

The path forward is uncertain, with the situation of the fleeing Rohingya being of immediate concern. In the short term, neighbouring countries and the global community are being called upon to shelter and support the refugees, particularly in Bangladesh. This is the most urgent need for those requiring support and a way we as individuals can help and assist in the short term. Please consider supporting the relief efforts where you are able.

In August 2017, the Rakhine Commission led by former UN Secretary General Kofi Annan, released its report on the path to longer-term stability in the region. Fully supported by Aung San Suu Kyi, the report focusses on the social, environmental and economic levers the government can control in the long term in the region. This report called for resolving citizenship issues, allowing freedom of movement, clarity of rights for those in the Rakhine area and ensuring a path to socio-economic development. The civilian government has committed to the recommendations of the Commission, but will need significant help collaborating with the military and Rakhine's politicians to support peace education, reconciliation, economic development and a stable political mandate.

What does RM do in Myanmar, and why?

Since 2015, Raw Material has supported the work carried out by Winrock, funded by USAID and supported by the Coffee Quality Institute (CQI) to develop specialty coffee value chains in Myanmar. The group’s work has introduced new production practices to smallholder farmers - many of whom are women in remote communities - who have quickly taken up the opportunity to improve the quality of their coffee and gained access to a new market for their crops.

The work of Winrock began in 2014 after the local community identified that they required assistance in this area and the work is planned to continue through to 2019. Raw Material’s involvement has taken form in sample analysis each season, judging the annual producer’s competition, providing feedback to producers, hosting Myanmar cuppings internationally, and linking the new supply with predictable demand.

What is the impact of the project?

From 2015 to 2017, smallholder coffee farmers taking part in this project in Shan state achieved gross income increases from approximately USD $583/Ha in 2015, to USD $801/Ha, in 2017. This is significant, as GDP per capita is USD $1,275, a figure still below both Bangladesh and India. So far in 2017, over 9,500 smallholder coffee farmers have taken part in training sessions to learn new production and processing techniques, upgraded through leading local industry firms. Cupping training has resulted in the first certified Q-graders in 2017 and for the first time, a local judge joined the cupping panel in the national producers competition. These quality improvements have lead to a growing number of producers selling to the international specialty coffee market and earning 1.5-2x the income through doing so. A percentage of this funding flows to the wider villages through cooperatives, with 2% going to the government through taxes to help fund public goods and services.

The 2017 Myanmar Coffee Association (MCA) Coffee Quality Competition was testament to the success of focussed initiatives in expanding new markets and coffee quality horizons for producers in the country. The third national competition of its kind saw 26 of the 72 competitors receive scores over 85 points for their coffees. This number is a product of focussed QC and development work, considering the 150% growth in 85+ scoring coffees in just a year alone.

The coffee is produced and sold by farmers in remote areas of the Shan hills, who belong to the Pa’O and Danu ethnic groups. These are people whose economic development has been hindered under the military and by international sanctions in response to the military rule. They are among the most vulnerable populations in the country. It is important to maintain support for the people and communities in this region and in doing so, demonstrate a path for the country to grow its local economies serving the needs of the rural population.

This is a timely opportunity to support coffee communities through sustainable growth in Myanmar. We believe stable financial structures for producers are within reach due to the unique suitability of coffee as a crop in the region. This is made possible by the multilateral investment of time, money and expertise, as well as the willingness people have demonstrated in growing their production capacities for the specialty market.

It is vital that work continues so that opportunities for long-term development can be sustained.